Law suit

I received a settlement from a car accident this year, is this taxable income?

posted

Lawsuit settlements from car accidents are generally not treated as taxable income. The IRS does not treat personal injury settlements, including those from accidents in a car, as income that is taxable. However, if the settlement includes payments that include compensation for lost wages or punitive damages, those may be subject to taxation.

I doubt it was compensation for lost wages or punitive damages, it was probably just personal injury settlements, which are not taxable.

Thank you,

John

CPA